ANNUAL REPORT AND FINANCIAL STATEMENTSd307gmaoxpdmsg.cloudfront.net/collegeaccounts1718/Nuffield.pdf · Governing Body, Officers and Advisers 2 - 4 . Report of the Governing Body

ANNUAL REPORT AND FINANCIAL STATEMENTSYear ended 31 July 2018

Registered Charity Number 1137506

Nuffield College Annual Report and Financial Statements Contents

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INDEX PAGE

Governing Body, Officers and Advisers 2 - 4

Report of the Governing Body 5 - 12

Auditor’s Report 13 - 14

Statement of Accounting Policies 15 - 19

Consolidated Statement of Financial Activities 20

Consolidated College Balance Sheet 21

Consolidated Statement of Cash Flows 22

Notes to the Financial Statements 23 - 40

Nuffield College Governing Body, Officers and Advisers Year ended 31 July 2018

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MEMBERS OF THE GOVERNING BODY

The Members of the Governing Body are the College’s charity trustees under charity law. The members of the Governing Body who served in office as Trustees during the year or subsequently are listed below.

Elected/Resigned/Retired (1) (2) (3) (4) (5)

Warden

Sir A W Dilnot ● ● ● ●

Official Fellows

N D de Graaf

R Duch ●

G Evans ● ●

I Jewitt ● ●

J O Jonsson ●

M A Meyer

Professorial Fellows

K Adam Elected 01/09/2018

B Ansell ●

N Bermeo Retired 30/09/2017

F Billari Resigned 31/01/2018 – unpaid leave from 01/02/2017 up to leave date

R Breen

S Broadberry

M Browning Retired 30/09/2017

E Bukodi

I Crawford

P Culpepper Elected 01/10/2018

J G Darwin Retired 30/09/2017 ●

J Dill Elected 01/10/2017 ●

A Eggers ●

M Ellison ●

R M Fitzpatrick ● ●

E Gonzalez Ocantos

J Green Elected 01/09/2018


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Elected/Resigned/Retired (1) (2) (3) (4) (5)

R Kashyap Elected 01/09/2017

M P Keane Resigned 31/08/2017

D S King

D Kirk

P Klemperer ●

C Laborde

H Low Elected 01/10/2018

C Mills ●

M Mills

C W S Monden

B Nielsen

K W S Roberts ●

Bo Rothstein Resigned 31/12/2017 ●

D Rueda ●

G Sasse On leave of absence for 3 years from 01/10/2016

D J Snidal

Supernumerary Fellows

E Kechagia-Ovseiko ● ● ● ●

T Moore ● ● ● ●

Research Fellows

S Bond

Sir D Hendry Stepped down as a trustee 30/09/2018 ●

During the year the main activities of the Governing Body were carried out through five committees. The current membership of these committees is shown above for each Fellow.

(1) Strategy and Resources Committee

(2) Investment Committee

(3) Personnel & Domestic Committee

(4) Library Committee

(5) Information Systems Committee

Two additional committees, chaired by external non-trustees, advise the Governing Body. These are the Audit Committee and the Fellows’ Remuneration Review Committee.


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COLLEGE SENIOR STAFF

The senior staff of the College to whom day to day management is delegated are as follows.

Andrew Dilnot Warden

Eleni Kechagia-Ovseiko Senior Tutor

Gwilym Hughes Head of the Endowment Office

Tom Moore Bursar

Yanislava Moyse College Accountant

COLLEGE ADVISERS

Investment managers OLIM Ltd, 15 Berkeley Street, London W1J 8DY Majedie Asset Management, 10 Old Bailey, London EC4M 7NG Oxford University Endowment Management Limited King Charles House, Park End Street, Oxford, OX1 1JD Investment property managers Savills Plc, 33 Margaret Street, London W1G 0JD meterhoch2! Hausverwaltungen. GmbH, Schwarzbacher Str. 3, 10711 Berlin, Germany Auditor Critchleys Audit LLP, Beaver House, 23-38 Hythe Bridge Street, Oxford OX1 2EP Bankers Royal Bank of Scotland Group Plc, 36 St Andrew Square, Edinburgh EH2 2YB J P Morgan, 1 Knightsbridge, London SW1X 7LX. Solicitors Knights Professional Services Limited, Midland House, West Way, Botley, Oxford OX2 0PH Brookstreet des Roches LLP, 25A Western Avenue, Milton Park, Abingdon OX14 4SH Roever Broenner Susat Mazars GmbH & Co. KG, Alt-Moabit 2, 10557 Berlin, Germany Surveyors Savills Plc, 33 Margaret Street, London W1G 0JD Adkin, Orpwood House, School Road, Ardington, Wantage, Oxfordshire, OX12 8PQ College address New Road Oxford OX1 1NF Registered Charity Number 1137506 Website www.nuffield.ox.ac.uk

Nuffield College Report of the Governing Body Year ended 31 July 2018

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The Members of the Governing Body present their Annual Report for the year ended 31 July 2018 under the Charities Act 2011, together with the audited financial statements for the year.

REFERENCE AND ADMINISTRATIVE INFORMATION

The Warden and Fellows of Nuffield College in the University of Oxford, which is known as Nuffield College, (“the College”) is an eleemosynary chartered charitable corporation aggregate. It was founded by Viscount Nuffield under a Deed of Covenant and Trust dated 16 November 1937 and was granted the Royal Charter of Queen Elizabeth the Second on 18 April 1958. The corporation comprises the Warden and Fellows.

The names of all Members of the Governing Body at the date of this report and of those in office during the year, together with details of the senior staff and advisers of the College, are given on pages 2 to 4.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing documents

The College is governed by its Charter and Statutes dated 18 April 1958.

Governing Body

The Governing Body is constituted and regulated in accordance with the College Statutes, the terms of which are enforceable ultimately by the Visitor, who is the Master of the Rolls. The Governing Body is self-appointing, by election.

New members of the Governing Body are elected on the basis of academic distinction, or their ability to serve the College in other ways.

The Governing Body determines the ongoing strategic direction of the College and regulates its administration and the management of its finances and assets. It meets regularly under the chairmanship of the Warden.

Recruitment and training of Members of the Governing Body

New Members of the Governing Body are recruited by election and inducted into the workings of the College, including Governing Body policy and procedures.

Members of the Governing Body are made aware of Charity Commission guidance to trustees and may attend external trustee training and information courses to keep them informed on current issues in the sector and on regulatory requirements. Trustee training (delivered by Penningtons Manches) is organised by the Conference of Colleges on an annual basis and is open to all new governing body fellows.

Remuneration of Members of the Governing Body and Senior College Staff Members of the Governing Body, who are primarily Fellows engaged in teaching and research, receive no remuneration or benefits from their trusteeship of the College. Those trustees who are also employees of the College receive remuneration for their work as employees of the College which is set in accordance with the advice of the College’s Fellows’ Remuneration Review Committee (FRRC). Where possible, remuneration is set in line with that awarded to the University’s academic staff. FRRC consists of a Chair plus three members, normally including at least two current Visiting Fellows; none of the Committee’s members are trustees and none are in receipt of remuneration from the College. The Committee provides independent scrutiny of proposals concerning any changes to pay or conditions that would benefit Fellows, by testing them against three key principles: legitimacy, affordability, and reasonableness.


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Organisational management

The members of the Governing Body meet six times a year. The work of developing policies and monitoring their implementation is carried out by five principal committees:

• The Strategy and Resources Committee. Academic policies and the utilisation of College resources and functional assets.

• The Investment Committee. Supervision of the College investments and income policies, which includes at least two and up to four suitably qualified external members.

• The Personnel and Domestic Committee. Personnel and health & safety policies. Domestic arrangements including catering and maintenance.

• The Library Committee. Supervision of the College Library.

• The Information Systems Committee. Information systems policies and maintenance. Provision of IT equipment and support.

The day-to-day running of the College is delegated to the senior staff listed on page 4 (viz., the Warden, Senior Tutor, Head of the Endowment Office, Bursar, and College Accountant), and is supported by heads of the College’s administrative departments. The Governing Body is chaired by the Warden, who also chairs the College’s Investment Committee, Strategy and Resources Committee, Library Committee and Personnel and Domestic Committee. The Information Systems Committee is chaired by an IT Fellow (drawn from amongst the College’s Governing Body), who also has some responsibility for overseeing the relevant areas of the College’s IT activities. In addition, there are two committees that assist the College to control risks related to governance and conflicts of interest: a Fellows’ Remuneration Review Committee (as described above) and an Audit Committee, which has an external (not a trustee or employee) chair and two further external members, and which advises Governing Body on the effectiveness of the financial and other internal control systems of the College.

Group structure and relationships

The College also has one wholly owned non-charitable subsidiary: Nuffield Properties Ltd, which was dormant throughout the relevant period and also the previous period.

The College is part of the collegiate University of Oxford. Material interdependencies between the University and the College arise as a consequence of this relationship.

OBJECTIVES AND ACTIVITIES

Charitable Objects and Aims The College’s Objects are to advance postgraduate education and research in the social sciences. The Governing Body has considered the Charity Commission’s guidance on public benefit and - in keeping with its objects - the College’s aims for the public benefit are:

• to undertake world-class research and to facilitate the study of social science problems by co-operation between academic and non-academic persons;

• to disseminate the results of this research and contribute to public policy making; • to recruit and admit postgraduate students in the social sciences, and present them for matriculation in the

University of Oxford (election is open to all and is subject only to academic merit); • to supervise students who are studying for postgraduate degrees and prepare them for careers, in the

academic world or beyond; and • to contribute to the cultural, social, and economic life of the city of Oxford.


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To achieve these aims, the College will:

• collaborate with the University of Oxford to attract, recruit, and retain outstanding academic staff and postgraduate students;

• establish, in particular through its scheme of Visiting Fellowships, strong on-going relationships with figures in the public and private sectors;

• employ rigorous admissions procedures to select the best graduate students in the social sciences, providing innovative funding packages to ensure that admission is based on academic merit alone, regardless of financial means; and

• work closely and creatively with, inter alia, the University of Oxford and local authorities to identify and develop opportunities to contribute to the life of the city of Oxford.

The College will use the following criteria to measure the success of these strategies:

• the volume and quality of research published by academic members of the College (as assessed, inter alia, through exercises such as the Research Excellence Framework);

• the impact of this research outside of academia, and in particular on public policy; • other indicators of academic esteem (including, for example, prizes awarded and research grants won); • acceptance rates for the admission of graduate students, and their academic results; and • student placement records (in respect of both academic and non-academic careers).

Activities and objectives of the College The College’s activities are focused on furthering its stated objects and aims for the public benefit. In 2017/18, the College:

• elected four new Governing Body Fellows (Klaus Adam, Jane Green, Hamish Low, and Pepper Culpepper; all Professorial Fellows); 16 new Research Fellows; two Senior Research Fellows; four non-academic persons to Visiting Fellowship, and one Supernumerary Fellow;

• admitted 12 students to study for postgraduate taught courses in the Social Sciences, 20 postgraduate research students, and 13 visiting students;

• hosted more than 90 academic conferences or workshops; • continued to take forward plans for the redevelopment of the Oxpens site in the West End of Oxford,

through a Joint Venture Company in conjunction with the City Council; and • collaborated with the University of Oxford in the aim of establishing a Social Sciences Quarter in the West

End of Oxford.

Policy on and provision of bursary support The College only admits graduate students. It awards scholarships to cover or partially cover fees and maintenance costs. In 2017/18, College funds provided £918k towards such costs, which was 50% higher than the previous year (2017: £611k). Statement on fundraising activities Through its Development Office, the College builds relationships with alumni and other friends of the institution in order to foster a culture of giving. Potential donors are invited to give through a variety of fundraising tools, including dedicated alumni events and communications, face-to-face major gift solicitation, as well as an annual fund programme (direct mail appeals and telethons). Telethons are conducted in conjunction with Buffalo Fundraising Consultants. The College follows and has complied in full with the Fundraising Regulator’s “Code of Practice in Fundraising” and has committed to the Regulator’s “Fundraising Promise”. No complaints have been received about fundraising activities undertaken by the College or any of its commercial participants.


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ACHIEVEMENTS AND PERFORMANCE Some highlights from 2017/18 are set out below. A full record of the College’s academic activities for the year can be found in the Annual Report. The College elected four new Professorial Fellows: Klaus Adam, in conjunction with the Nuffield Professorship of Economics; Jane Green, as Gwilym Gibbon Senior Research Fellow in British Policy and Politics; Hamish Low, in conjunction with the James Meade Professorship of Economics; and Pepper Culpepper, in conjunction with the Professorship of Government and Public Policy at the Blavatnik School of Government. Kate Barker (External Member of the University of Oxford Council); Cressida Dick (Metropolitan Police Commissioner); Frances O’Grady (General Secretary of the Trades Union Congress) and Ernest Ryder (Senior President of Tribunals) were each elected to Visiting Fellowships, and Laura How, Chief Operating Officer of the Bodleian Libraries, was elected to a Supernumerary Fellowship. In July 2018, four fellows of the College were honoured by the British Academy. The Warden, Sir Andrew Dilnot, was awarded an Honorary Fellowship, while Ben Ansell and Melinda Mills – both Professorial Fellows – were elected as Fellows of the British Academy, and Honorary Fellow of Nuffield College Jerry Hausman was awarded a Corresponding Fellowship. In June, Melinda Mills was awarded an MBE for services to social science. Professorial Fellow Bess Bukodi was also awarded a Mid-Career Fellowship by the British Academy, to fund a research project which will revisit educational inequalities in Britain. Ezequiel Gonzalez Ocantos (Professorial Fellow) received further acclaim for his 2016 book Shifting Legal Visions: Judicial Change and Human Rights Trials in Latin America, which won the Best Book Award from the Human Rights Section of the International Studies Association. Ridhi Kashyap (also a Professorial Fellow) was awarded a ‘Big Data for Gender’ research grant from Data2X, an initiative of the United Nations Foundation, for a project that examines how digital trace data from the web can be leveraged to measure gender inequality indicators related to sustainable development goals, particularly in less developed country contexts. Elisabeth Garratt, Research Fellow in the Centre for Social Investigation, successfully applied for a research grant from the University of Oxford’s John Fell Fund to conduct research into people’s experiences of homelessness in the city of Oxford. The Centre for Social Investigation, which is led by Anthony Heath, is about to publish a book on Social Progress in Britain since the 1942 Beveridge Report, focussing on progress made in tackling Beveridge’s five giants of Want, Disease, Ignorance, Idleness and Squalor together with chapters on the new giants of Unfairness and Discord. In respect of student admissions, the College received and reviewed 169 applications from prospective students and made 41 offers. In total, 32 students started their course in September 2017: 10 in Economics (4 DPhil and 6 MPhil), 12 in Politics and International Relations (9 DPhil, 2 MPhil, and 1 MSc), 8 in Sociology (6 DPhil, 1 MPhil, and 1 MSc), and 2 in interdisciplinary subjects (Public Policy and History). 21 students in taught masters courses took exams at the end of the academic year. Of the eleven in the final year of their course, six achieved overall distinctions. 8 DPhil students completed their doctoral thesis, 6 of whom have subsequently secured academic posts. In 2017/18 the College continued a scheme which began the previous year to underwrite funding for all new students admitted at Nuffield for one of the courses offered by the College. This means that the College will provide the full funding required or partial funding in conjunction with another scholarship, in the event that a new student does not secure scholarship funding from other sources to meet the full costs of their study (fees and living expenses). By removing the funding uncertainty at an early stage in the admissions process, the College aims to attract and, crucially, retain applicants of the highest academic merit. The College’s Development Office, established in 2015, has continued to reach out, through events and other activities, to alumni and friends of the College, and has been successful in generating new donations and significant pledges, and notably has completed fundraising to endow a scholarship in memory of former fellow Albert H. 'Chelly' Halsey. Another endowed scholarship was launched with funds donated in memory of Tony Atkinson.


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FINANCIAL REVIEW

Income The College’s total income decreased by 3.7% to £11,300k in 2017/18 (2017: £11,733k), as a result of restructuring of the investment securities portfolio in the second half of the financial year. The College transferred £60m from income-focused equity managers to Oxford University Endowment Management (OUem), which resulted in temporary decline (4%) in investment income. The flow of investment income is expected to normalise within a year of the initial investment. Investment income continued to be the largest source of income to the College.

Income from charitable activities of £1,893k was 7% higher than the previous year, and consisted of student fee income of £234k (an increase of 7%), other HEFCE support of £170k, other academic and research income of £874k (an increase of 14%), and college residential income of £615k (a small increase of 0.3%).

Income from donations amounted to £193k (2017: £357k) and was composed mainly of endowment donations (£188k) to the Graduate Scholarship funds.

Expenditure

The College’s total expenditure increased by 2.5% to £10,613k and expenditure on charitable activities of £8,461k was similarly 2.5% higher than the previous year.

The cost of generating funds grew by 2.6% to £2,152k. Investment management costs rose by only 0.5% to £1,927k (2017: £1,918k). Fundraising costs of £225k were 26% higher than the previous year (2017: £179k), reflecting the increased activity of the recently established Development Office.

Result for the year

The College’s total consolidated funds increased by £15,271k in the year to £256,054k as at 31 July 2018 (2017: £240,783k), which represents an increase of 6.3%. The increase is mostly attributable to investment gains.

Investments

At the year end, the total group investments, combining the securities, property investments and the investment in JV, amounted to £266,461k. The total net investment return was 8.4% (2017: 16.7%), mainly attributable to securities appreciation, including unrealised gains on foreign exchange.

The value of the bank loan, measured at amortised cost, was £31,862k and the interest payable for the year was 1.54% (LIBOR plus 1%). After taking into account the bank loan and the net investment current assets of £6,648k, the total consolidated net investment assets stood at £241,247k at 31 July 2018 (2017: £226,913k).

Reserves policy

The College’s reserves policy is to maintain sufficient free reserves to meet short-term financial obligations in the event of an unexpected revenue shortfall.

The College’s general unrestricted funds at the year end amounted to £3,650k (2017: £2,241k), excluding an amount of £10,175k (2017: £11,106k) for the book value of fixed assets. In accordance with FRS 102, a pension reserve of £1,039k is included within unrestricted funds representing the defined benefit pension scheme liability.

Designated reserves at the year end amounted to £2,021k (2017: £1,582k), which included funds of £68k (2017: £67k) for specific research projects to be spent within ten years of the initial award and an academic fund of £1,953k (2017: £1,515k), set up in March 2014, for the purpose of advancing postgraduate education and research.


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Risk management

Policies and procedures within the College are reviewed by the relevant College Committee, and each key Committee maintains its own Risk Register. Financial risks are assessed by the Strategy and Resources and Audit Committees, and investment risks are monitored by the Investment Committee. In addition, the Bursar and heads of the College departments meet regularly to review health and safety issues. When it is not able to address risk issues using internal resources, the College takes advice from experts external to the College with specialist knowledge. Training courses and other forms of career development are promoted to members of staff to enhance their skills in risk-related areas. Governance & Compliance

Risk Managing strategies

Lack of strategy / skills Strategy and Resources Committee; budget-setting and quarterly forecasting; recruitment and induction processes.

Conflict of interest / non-charitable activities Fellows Remuneration Review Committee; Conflict of Interest policy; recruitment and induction processes.

Regulatory reporting requirements Allocate roles and responsibilities; training and induction; regular departmental reviews.

Academic


Failure to recruit and retain world class academic staff Strategic planning; competitive salaries and benefits; appointment procedures; collaboration with University.

Failure to attract and admit top quality graduate students Admissions planning and processes; scholarships; quality of student experience; collaboration with University; low overall intake.

Financial


Fraud; budgetary control Audit Committee; internal controls; segregation of duties; regular reporting.

Investment policy Investment Committee; regular reporting; diversification of holdings; external fund managers.

Operational


Loss of key staff Systems, policies, and processes; succession planning; regular departmental reviews.

Information security; data loss Information Systems Committee; back-up arrangements; regular reviews; collaboration with University; business continuity planning.

Health and safety; employment issues Recruitment, induction, and training; management processes; monitoring and reporting; external controls.


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Investment policy, objectives and performance

The College’s investment objectives are to balance current and future beneficiary needs by:

• maintaining (at least) the value of the investments in real terms;

• producing a consistent and sustainable amount to support expenditure; and

• delivering these objectives within acceptable levels of risk.

To meet these objectives the College’s investments as a whole are managed on a total return basis, maintaining diversification across a range of asset classes in order to produce an appropriate balance between risk and return. In line with this approach, the College statutes allow the College to invest permanent endowments to maximise the related total return and to make available for expenditure each year an appropriate proportion of the unapplied total return.

The investment strategy, policy and performance are monitored by the Investment Committee.

Under the total return accounting basis, it is the Governing Body’s policy to use a long-term spending rate combined with a smoothing rule, which adjusts spending gradually in accordance with changes in the endowment’s market value (after costs). The amount released under this policy is currently based on an income component, determined by a weighted average of allowable prior spending adjusted for inflation (80% weight) and a market component, the amount which would have been spent using 4.3% of the current endowment value (20% weight). This smoothing results in a lag in reaching the long-term rate. The sum of the income and market components is the total endowment income available for spending.

The equivalent of 3.40% of the opening balances of the relevant funds, plus costs, was extracted as income on the total return basis in the year (2017: 3.72%). The Governing Body will keep the level of income withdrawn under review to balance the needs and interests of current and future beneficiaries of the College’s activities.

FUTURE PLANS

The core elements of the College’s future plans are:

• to continue to recruit and retain outstanding academic staff and students in the social sciences;

• to take steps to improve student experience and outcomes and prepare students for the academic and non-academic job markets;

• to produce and disseminate high quality and innovative research in the social sciences and to pursue collaborations with the non-academic world;

• to form strong ongoing relationships with alumni and with significant figures in the public and private sectors;

• to work with the University of Oxford to establish a Social Sciences Quarter in the west end of Oxford.


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STATEMENT OF ACCOUNTING AND REPORTING RESPONSIBILITIES

The Governing Body is responsible for preparing the Report of the Governing Body and the financial statements in accordance with applicable law and regulations.

Charity law requires the Governing Body to prepare financial statements for each financial year. Under that law the Governing Body have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102: The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102).

Under charity law the Governing Body must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the College and of its net income or expenditure for that period. In preparing these financial statements, the Governing Body is required to:

• select the most suitable accounting policies and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent;

• state whether applicable accounting standards, including FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

• state whether a Statement of Recommended Practice (SORP) applies and has been followed, subject to any material departures which are explained in the financial statements.

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the College will continue to operate.

The Governing Body is responsible for keeping proper accounting records that are sufficient to show and explain the College’s transactions and disclose with reasonable accuracy at any time the financial position of the College and enable them to ensure that the financial statements comply with the Charities Act 2011. They are also responsible for safeguarding the assets of the College and ensuring their proper application under charity law and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Approved by the Governing Body on 31 October 2018 and signed on its behalf by:

Sir Andrew Dilnot

Warden

Nuffield College INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE GOVERNING BODY OF NUFFIELD COLLEGE

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Opinion

We have audited the financial statements of Nuffield College (the “Charity”) for the year ended 31 July 2018 which comprise the Statement of Accounting Policies, the Consolidated Statement of Financial Activities, the Consolidated and College Balance Sheets, the Consolidated Cash Flow Statement and notes to the financial statements. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements: • give a true and fair view of the state of the group and charity’s affairs as at 31 July 2018 and of the group’s

income and expenditure for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

• have been prepared in accordance with the requirements of the Charities Act 2011.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the Members of the Governing Body’s use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

• the Members of the Governing Body have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Charity’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The Members of the Governing Body are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities Act 2011 requires us to report to you if, in our opinion:

• sufficient accounting records have not been kept;

Nuffield College INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE GOVERNING BODY OF NUFFIELD COLLEGE

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Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities Act 2011 requires us to report to you if, in our opinion:

• sufficient accounting records have not been kept;

• the financial statements are not in agreement with the accounting records and returns; or

• we have not obtained all the information and explanations necessary for the purposes of our audit.

Responsibilities of the Members of the Governing Body

As explained more fully in the Statement of Accounting and Reporting Responsibilities [set out on page 12], the Members of the Governing Body are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Members of the Governing Body are responsible for assessing the Charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Members of the Governing Body either intend to liquidate the Charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the College’s Governing Body, as a body, in accordance with section 144 of the Charities Act 2011 and the regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the Members of the Governing Body those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the College’s Governing Body as a body, for our audit work, for this report, or for the opinions we have formed.

Critchleys Audit LLP Statutory Auditor Oxford

Date: 2 November 2018

Critchleys LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

Nuffield College Statement of Accounting Policies Year ended 31 July 2018

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1. Scope of the financial statements

The financial statements present the Consolidated Statement of Financial Activities (SOFA), the Consolidated and College Balance Sheets and the Consolidated Statement of Cash Flows for the College and its interest in the OxWED joint venture, under the equity method of accounting. No separate SOFA has been presented for the College alone as currently permitted by the Charity Commission on a concessionary basis for the filing of consolidated financial statements.

2. Basis of accounting

The College’s individual and consolidated financial statements have been prepared in accordance with United Kingdom Accounting Standards, in particular ‘FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102).

The College is a public benefit entity for the purposes of FRS 102 and a registered charity. The College has therefore also prepared its individual and consolidated financial statements in accordance with ‘The Statement of Recommended Practice applicable to charities preparing their financial statements in accordance with FRS 102’ (The Charities SORP (FRS 102)).

The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the measurement of investments and certain financial assets and liabilities at fair value with movements in value reported within the Statement of Financial Activities (SOFA). The principal accounting policies adopted are set out below and have been applied consistently throughout the year.

3. Accounting judgements and estimation uncertainty

In preparing financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements. The following judgements and estimates are considered by the Governing Body to have most significant effect on amounts recognised in the financial statements.

The College is a member of the Universities Superannuation Scheme (USS) and University of Oxford Staff Pension Scheme (OSPS), these are multi-employer pension schemes both of which are in deficit. The College has recognised a provision for its commitments under the agreed deficit reduction plans for each scheme. In calculating these provisions the College has made a number of assumptions which are disclosed in note 23.

The College carries investment property at fair value in the balance sheet, with changes in fair value being recognised in the income and expenditure section of the SOFA. Independent valuations are obtained to determine fair value at the balance sheet date.

With respect to the next financial year, the most significant areas of uncertainty that affect the carrying value of assets held by the College are the level of investment return and the performance of investment markets.

4. Income recognition

All income is recognised once the College has entitlement to the income, the economic benefit is probable and the amount can be reliably measured.


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a. Income from fees, HEFCE support and other charges for services

Fees receivable, less any scholarships, bursaries or other allowances granted from the College unrestricted funds, HEFCE support and charges for services and use of the premises are recognised in the period in which the related service is provided.

b. Income from donations, grants and legacies

Donations and grants that do not impose specific future performance-related or other specific conditions are recognised on the date on which the charity has entitlement to the resource, the amount can be reliably measured and the economic benefit to the College of the donation or grant is probable. In case of donations, entitlement usually arises immediately on its receipt. Donations and grants subject to performance-related conditions are recognised as and when those conditions are met. Donations and grants subject to other specific conditions are recognised as those conditions are met or their fulfilment is wholly within the control of the College and it is probable that the specified conditions will be met.

Legacies are recognised following grant of probate and once the College has received sufficient information from the executor(s) of the deceased’s estate to be satisfied that the gift can be reliably measured and that the economic benefit to the College is probable.

Donations, grants and legacies accruing for the general purposes of the College are credited to unrestricted funds.

Donations, grants and legacies which are subject to conditions as to their use imposed by the donor or set by the terms of an appeal are credited to the relevant restricted fund or, where the donation, grant or legacy is required to be held as capital, to the endowment funds. Where donations are received in kind (as distinct from cash or other monetary assets), they are measured at the fair value of those assets at the date of the gift. Research grants income is usually conditional on delivery of specified research and incurring pre-determined expenditure, therefore performance condition is delivery of particular level of service, measured by proportion of costs incurred.

c. Investment income

Interest on bank balances is accounted for on an accrual basis with interest recognised in the period to which the interest relates.

Income from fixed interest debt securities is recognised using the effective interest rate method.

Dividend income and similar distributions are recognised when the right to receive payment can be established.

Income from investment properties is recognised in the period to which the rental income relates.

5. Expenditure

Expenditure is accounted for on an accruals basis. A liability and related expenditure is recognised when a legal or constructive obligation commits the College to expenditure that will probably require settlement, the amount of which can be reliably measured or estimated.

Grants awarded that are not performance-related are charged as an expense as soon as a legal or constructive obligation for their payment arises. Grants subject to performance-related conditions are expensed as the specified conditions of the grant are met.

All expenditure including support costs and governance costs are allocated or apportioned to the applicable expenditure categories in the Statement of Financial Activities (the SOFA).

Support costs which includes governance costs (costs of complying with constitutional and statutory requirements) and other indirect costs are apportioned to expenditure categories in the SOFA based on the estimated amount attributable to that activity in the year, either by reference to staff time or the use made of the underlying assets, as appropriate. Irrecoverable VAT is included with the item of expenditure to which it relates.


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6. Leases

Leases of assets that transfer substantially all the risks and rewards of ownership are classified as finance leases. The costs of the assets held under finance leases are included within fixed assets and depreciation is charged over the shorter of the lease term and the assets’ useful lives. Assets are assessed for impairment at each reporting date. The corresponding capital obligations under these leases are shown as liabilities and recognised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. Lease payments are apportioned between capital repayment and finance charges in the SOFA so as to achieve a constant rate of interest on the remaining balance of the liability.

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Rentals payable under operating leases are charged in the SOFA on a straight-line basis over the relevant lease terms. Any lease incentives are recognised over the lease term on a straight-line basis.

7. Tangible fixed assets

Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Expenditure on the acquisition or enhancement of land and on the acquisition, construction and enhancement of buildings which is directly attributable to bringing the asset to its working condition for its intended use and amounting to more than £25,000 together with expenditure on equipment costing more than £5,000 is capitalised.

Where a part of a building or equipment is replaced and the costs capitalised, the carrying value of those parts replaced is derecognised and expensed in the SOFA.

Other expenditure on equipment incurred in the normal day-to-day running of the College and is charged to the SOFA as incurred.

8. Depreciation

Depreciation is provided to write off the cost of all relevant tangible fixed assets, less their estimated residual value, in equal annual instalments over their expected useful economic lives as follows:

Freehold properties, including major extensions 50 years

Leasehold properties 50 years or period of lease if shorter

Building improvements 25 years

Equipment 3 years

Freehold land is not depreciated. The cost of maintenance is charged in the SOFA in the period in which it is incurred.

At the end of each reporting period, the residual values and useful lives of assets are reviewed and adjusted if necessary. In addition, if events or change in circumstances indicate that the carrying value may not be recoverable then the carrying values of tangible fixed assets are reviewed for impairment.


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9. Investments

Investment properties are initially recognised at their cost and subsequently measured at their fair value (market value) at each reporting date. Purchases and sales of investment properties are recognised on exchange of contracts.

Listed investments are initially measured at their cost and subsequently measured at their fair value at each reporting date. Fair value is based on their quoted price at the balance sheet date without deduction of the estimated future selling costs.

Investments such as hedge funds and private equity funds which have no readily identifiable market value are initially measured at their costs and subsequently measured at their fair value at each reporting date without deduction of the estimated future selling costs. Fair value is based on the most recent valuations available from their respective fund managers.

Other unquoted investments are valued using primary valuation techniques such as earnings multiples, recent transactions and net assets where reliable estimates can be made – otherwise at cost less any impairment.

Changes in fair value and gains and losses arising on the disposal of investments are credited or charged to the income or expenditure section of the SOFA as ‘gains or losses on investments’ fund holding or disposing of the relevant investment.

10. Other financial instruments

a. Derivatives

Derivative financial instruments are initially measured at fair value on the date the contract is entered into and are subsequently measured at fair value. Changes in fair value are credited or charged to the income or expenditure section of the SOFA. Hedge accounting is not currently applied to derivatives.

b. Cash and cash equivalents

Cash and cash equivalents include cash at banks and in hand and short term deposits with a maturity date of three months or less.

c. Debtors and creditors

Debtors and creditors receivable or payable within one year of the reporting date are carried at their at transaction price. Debtors and creditors that are receivable or payable in more than one year and not subject to a market rate of interest are measured at the present value of the expected future receipts or payment discounted at a market rate of interest.

11. Stocks

Stocks are valued at the lower of cost and net realisable value, cost being the purchase price on a first in, first out basis.

12. Foreign currencies

The functional and presentation currency of the College and its subsidiaries is the pound sterling.

Transactions denominated in foreign currencies during the year are translated into pounds sterling using the spot exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into pounds sterling at the rates applying at the reporting date.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the exchange rates at the reporting date are recognised in the income and expenditure section of the SOFA.


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13. Total Return investment accounting

The College statutes authorise the College to adopt a ‘total return’ basis for the investment of its permanent endowment. The College can invest its permanent endowments without regard to the capital/income distinctions of standard trust law and with discretion to apply any part of the accumulated total return on the investment as income for spending each year. Until this power is exercised, the total return is accumulated as a component of the endowment known as the unapplied total return that can be either be retained for investment or released to income at the discretion of the Governing Body.

14. Fund accounting

The total funds of the College are allocated to unrestricted, restricted or endowment funds based on the terms set by the donors or set by the terms of an appeal. Endowment funds are further sub-divided into permanent and expendable.

Unrestricted funds can be used in furtherance of the objects of the College at the discretion of the Governing Body. The Governing Body may decide that part of the unrestricted funds shall be used in future for a specific purpose and this will be accounted for by transfers to appropriate designated funds.

Restricted funds comprise gifts, legacies and grants where the donors have specified that the funds are to be used for particular purposes of the College. They consist of either gifts where the donor has specified that both the capital and any income arising must be used for the purposes given or the income on gifts where the donor has required or permitted the capital to be maintained and with the intention that the income will be used for specific purposes within the College’s objects.

Permanent endowment funds arise where donors specify that the funds are to be retained as capital for the permanent benefit of the College. Any part of the total return arising from the capital that is allocated to income will be accounted for as unrestricted funds unless the donor has placed restrictions on the use of that income, in which case it will be accounted for as a restricted fund.

Expendable endowment funds are similar to permanent endowment in that they have been given, or the College has determined based on the circumstances that they have been given, for the long term benefit of the College. However, the Governing Body may at their discretion determine to spend all or part of the capital.

15. Pension costs

The costs of retirement benefits provided to employees of the College through two multi-employer defined pension schemes are accounted for as if these were defined contribution schemes as information is not available to use defined benefit accounting in accordance with the requirements of FRS 102. The College's contributions to these schemes are recognised as a liability and an expense in the period in which the salaries to which the contributions relate are payable.

In addition, a liability is recognised at the balance sheet date for the discounted value of the expected future contribution payments under the agreements with these multi-employer schemes to fund the past service deficits.

Nuffield CollegeConsolidated Statement of Financial ActivitiesFor the year ended 31 July 2018

Unrestricted Restricted Endowed 2018 2017Funds Funds Funds Total Total

Notes £'000 £'000 £'000 £'000 £'000

INCOME AND ENDOWMENTS FROM:

Charitable activities: 1Teaching, research and residential 1,893 0 0 1,893 1,768

Other Trading Income 3 0 0 0 0 0

Donations and legacies 2 3 2 188 193 357

InvestmentsInvestment income 4 71 256 8,887 9,214 9,608Total return allocated to income 14 7,032 0 (7,032) 0 0

Other income 0 0 0 0 0

Total income 8,999 258 2,043 11,300 11,733

EXPENDITURE ON: 5

Charitable activities:Teaching, research and residential 7,820 641 0 8,461 8,258

Generating funds:Fundraising 225 0 0 225 179Trading expenditure 0 0 0 0 0Investment management costs (incl. Loan interest) 17 64 1,846 1,927 1,918

Total Expenditure 8,062 705 1,846 10,613 10,355

Net Income/(Expenditure) before gains 937 (447) 197 687 1,378

Net gains/(losses) on investments 10, 11 0 423 14,634 15,057 30,872

Net Income/(Expenditure) 937 (24) 14,831 15,744 32,250

Group share of joint venture's profit/(loss) 12 0 0 (473) (473) (160)

Transfers between funds 19 0 272 (272) 0 0

Other recognised gains/lossesGains/(losses) on revaluation of fixed assets 0 0 0 0 0Actuarial gains/(losses) on defined benefit pension schemes 0 0 0 0 0

Net movement in funds for the year 937 248 14,086 15,271 32,090Fund balances brought forward 19 13,870 7,413 219,500 240,783 208,693

Funds carried forward at 31 July 14,807 7,661 233,586 256,054 240,783

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Nuffield CollegeConsolidated and College Balance SheetsAs at 31 July 2018

2018 2017 2018 2017Group Group College College

Notes £'000 £'000 £'000 £'000

FIXED ASSETSTangible assets 9 10,175 11,106 10,175 11,106Heritage assets 0 0 0 0Property investments 10 110,205 111,940 110,205 111,940Other Investments 11 150,728 139,165 157,328 145,765Investment in joint venture 12 5,528 6,001

Total Fixed Assets 276,636 268,212 277,708 268,811

CURRENT ASSETSStocks 70 80 70 80Debtors 15 8,160 2,675 8,160 2,675Investments 0 0 0 0Cash at bank and in hand 6,465 4,629 6,465 4,629

Total Current Assets 14,695 7,384 14,695 7,384

LIABILITIESCreditors: Amounts falling due within one year 16 2,376 1,910 2,376 1,910

NET CURRENT ASSETS/(LIABILITIES) 12,319 5,474 12,319 5,474

TOTAL ASSETS LESS CURRENT LIABILITIES 288,955 273,686 290,027 274,285

CREDITORS: falling due after more than one year 17 31,862 31,844 31,862 31,844

Provisions for liabilities and charges 18 0 0 0 0

257,093 241,842 258,165 242,441

Defined benefit pension scheme liability 23 1,039 1,059 1,039 1,059

TOTAL NET ASSETS/(LIABILITIES) 256,054 240,783 257,126 241,382

FUNDS OF THE COLLEGE 19

Endowment funds 233,586 219,500 234,658 220,099

Restricted funds 7,661 7,413 7,661 7,413

Unrestricted fundsDesignated funds 12,196 12,688 12,196 12,688General funds 3,650 2,241 3,650 2,241Revaluation reserve 0 0 0 0Pension reserve 23 (1,039) (1,059) (1,039) (1,059)

256,054 240,783 257,126 241,382

The financial statements were approved and authorised for issue by the Governing Body of Nuffield Collegeon 31 October 2018

Warden: Sir A W Dilnot

Bursar: Mr T Moore

NET ASSETS/(LIABILITIES) BEFORE PENSION ASSET OR LIABILITY

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Nuffield CollegeConsolidated Statement of Cash FlowsFor the year ended 31 July 2018

2018 2017Notes £'000 £'000

Net cash provided by (used in) operating activities 26 (8,573) (8,241)

Cash flows from investing activities

Dividends, interest and rents from investments 8,866 8,653

Proceeds from the sale of property, plant and equipment 1,388 195

Purchase of property, plant and equipment (274) (99)

Proceeds from sale of investments 74,142 8,568

Purchase of investments (62,630) (6,152)

Net cash provided by (used in) investing activities 21,492 11,165

Cash flows from financing activitiesInterest paid (494) (453)Receipt of endowment 178 341

Net cash provided by (used in) financing activities (316) (112)

Change in cash and cash equivalents in the reporting period 12,603 2,812

12,252 9,368

82 72

27 24,937 12,252

Cash and cash equivalents at the beginning of the reporting period

Cash and cash equivalents at the end of the reporting period

Change in cash and cash equivalents due to exchange rate movements

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Nuffield CollegeNotes to the financial statementsFor the year ended 31 July 2018

1 INCOME FROM CHARITABLE ACTIVITIES2018 2017

Teaching, Research and Residential £'000 £'000Unrestricted funds

Tuition fees - UK and EU students 103 103Tuition fees - Overseas students 116 102Other fees 15 14Other HEFCE support 170 169Other academic income 874 767College residential income 615 613

1,893 1,768

Total Teaching, Research and Residential 1,893 1,768

Total income from charitable activities 1,893 1,768

2 DONATIONS AND LEGACIES2018 2017£'000 £'000

Donations and LegaciesUnrestricted funds 3 14Restricted funds 2 2Endowed funds 188 341

193 357

3 INCOME FROM OTHER TRADING ACTIVITIES2018 2017£'000 £'000

Subsidiary company trading income 0 0Other trading income 0 0

0 0

4 INVESTMENT INCOME2018 2017£'000 £'000

Unrestricted funds Other investment income 71 75Bank interest 0 0

71 75

Restricted funds Other property income 0 0Equity dividends 255 296Interest on fixed term deposits and cash 1 1Other interest 0 0

256 297

Endowed funds Agricultural rent 48 47Commercial rent 6,911 6,699Other property income 54 153Equity dividends 1,352 1,888Interest on fixed term deposits and cash 522 449Other investment income 0 0

8,887 9,236

Total Investment income 9,214 9,608

The above analysis includes £172k received from Oxford University from publicly accountable funds under the CFF Scheme (2017: £170k).

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5 ANALYSIS OF EXPENDITURE2018 2017£'000 £'000

Charitable expenditureDirect staff costs allocated to:

Teaching, research and residential 3,993 4,004

Other direct costs allocated to:Teaching, research and residential 3,735 3,194

Support and governance costs allocated to:Teaching, research and residential 733 1,060

Total charitable expenditure 8,461 8,258

Expenditure on raising fundsDirect staff costs allocated to:

Fundraising 136 116Investment management costs 69 90

Other direct costs allocated to:Fundraising 80 53Investment management costs 1,858 1,823

Support and governance costs allocated to:Fundraising 9 10Investment management costs 0 5

Total expenditure on raising funds 2,152 2,097

Total expenditure 10,613 10,355

6 ANALYSIS OF SUPPORT AND GOVERNANCE COSTSTeaching

Generating and Public 2018Funds Research Worship Heritage Total£'000 £'000 £'000 £'000 £'000

Financial administration 3 278 0 0 281Domestic administration 2 193 0 0 195Human resources 1 94 0 0 95IT 3 304 0 0 307Depreciation 0 285 0 0 285Loss/(profit) on fixed assets 0 (468) 0 0 (468)Other finance charges 0 27 0 0 27Governance costs 0 20 0 0 20

9 733 0 0 742

TeachingGenerating and Public 2017

Funds Research Worship Heritage Total£'000 £'000 £'000 £'000 £'000

Financial administration 3 264 0 0 267Domestic administration 2 182 0 0 184Human resources 1 82 0 0 83IT 4 381 0 0 385Depreciation 0 282 0 0 282Loss/(profit) on fixed assets 0 (195) 0 0 (195)Other finance charges 5 45 0 0 50Governance costs 0 19 0 0 19

15 1,060 0 0 1,075

The College is liable to be assessed for Contribution under the provisions of Statute XV of the University of Oxford. The Contribution Fund is used to make grants and loans to colleges on the basis of need. Contributions are calculated annually in accordance with regulations made by the Council of the University of Oxford.

The comparative year's (2017) resources expended of £10,355k represented £7,680k from unrestricted funds, £829k from restricted funds and £1,846k from endowed funds.

The teaching and research costs include College Contribution balancing payment of £10k in respect of the final phase of the current scheme (2017: £154k).

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The following costs are attributed on a per capita basis:Finance and administration and human resources costsDepreciation costs IT costs

2018 2017£'000 £'000

Governance costs comprise:Auditor's remuneration - audit services 15 15Other governance costs 5 4

20 19

7 GRANTS AND AWARDS

2018 2017£'000 £'000

Unrestricted fundsGrants to individuals:

Scholarships, prizes and grants 881 575Bursaries and hardship awards 3 0

Grants to other institutions 4 3Total unrestricted 888 578

Restricted fundsGrants to individuals:

Scholarships, prizes and grants 37 36Total restricted 37 36

Total grants and awards 925 614

8 STAFF COSTS2018 2017

The aggregate staff costs for the year were as follows. £'000 £'000

Salaries and wages 3,998 3,939Social security costs 379 372Pension costs:

Pension contributions 513 568Staff costs related to pension liability (39) (56)

4,851 4,823

Key management remuneration

The total remuneration paid to key management was £550k (2017: £523k).Key management are considered to be the Warden, Senior Tutor, Head of Endowment Office, Bursar and College Accountant.

The average number of employees of the College, excluding Trustees, on a full time equivalent basis was as follows:2018 2017

Tuition and research 36 39College residential 34 35Fundraising 3 2Support 14 15

Total 87 91

The average number of employed College Trustees during the year was as follows:University Lecturers 9 10Other teaching and research 28 28Other 3 3

Total 40 41

During the year the College funded research grants and bursaries to students from its restricted and unrestricted funds as follows:

The above costs are included within the charitable expenditure on Teaching, research and residential. Grants to other institutions comprise donations to other charitable organisations.

No amount has been included in governance costs for the direct employment costs or reimbursed expenses of the College Fellows on the basis that these payments relate to the Fellows' involvement in the College's charitable activities. Details of the remuneration of the Fellows and their reimbursed expenses are included as a separate note within these financial statements.

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2018 2017

£60,001-£70,000 2 3

The number of the above employees with retirement benefits accruing was as follows:

In defined benefits schemes 1 2

9 TANGIBLE FIXED ASSETS

Group and College Leasehold Freehold Plant and Fixtures,land and land and machinery fittings andbuildings buildings equipment Total

£'000 £'000 £'000 £'000 £'000CostAt start of year 2,970 12,280 0 168 15,418Additions 172 54 0 48 274Disposals 0 (949) 0 0 (949)

At end of year 3,142 11,385 0 216 14,743

Depreciation and impairmentAt start of year 712 3,493 0 107 4,312Depreciation charge for the year 38 209 0 38 285Depreciation on disposals 0 (29) 0 0 (29)Impairment 0 0 0 0 0

At end of year 750 3,673 0 145 4,568

Net book valueAt end of year 2,392 7,712 0 71 10,175

At start of year 2,258 8,787 0 61 11,106

The College also engages temporary staff and agency workers who are not on the College payroll. The following information relates to the employees of the College excluding the College Trustees. Details of the remuneration and reimbursed expenses of the College Trustees are included as a separate note in these financial statements.

The number of employees (excluding the College Trustees) during the year whose gross pay and benefits (excluding employer NI and pension contributions) fell within the following bands was:

The College has substantial long-held historic assets all of which are used in the course of the College’s teaching and research activities. These comprise listed buildings on the College site, together with their contents comprising works of art, ancient books and manuscripts and other treasured artefacts. Because of their age and, in many cases, unique nature, reliable historical cost information is not available for these assets and could not be obtained except at disproportionate expense. However, in the opinion of the Trustees the depreciated historical cost of these assets is now immaterial.

Redundancy and termination payments are accounted for in the period in which the payments were made. During the current financial year, redundancy and termination payments amounted to £64k (2017: £nil). These costs were charged to unrestricted funds.

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10 PROPERTY INVESTMENTS

Group and College 2018 2017Agricultural Commercial Other Total Total

£'000 £'000 £'000 £'000 £'000

Valuation at start of year 3,900 108,040 0 111,940 102,589Additions and improvements at cost 0 913 0 913 1,711Disposals 0 (6,569) 0 (6,569) (1,862)Revaluation gains/(losses) in the year 1,400 2,521 0 3,921 9,502

Valuation at end of year 5,300 104,905 0 110,205 111,940

11 OTHER INVESTMENTS

All investments are held at fair value.2018 2017£'000 £'000

Group investmentsValuation at start of year 139,165 118,130New money invested 61,678 4,401Amounts withdrawn (61,251) (4,736)(Decrease)/increase in value of investments 11,136 21,370

Group investments at end of year 150,728 139,165

Loan to Joint Venture (note 12) 6,600 6,600

College investments at end of year 157,328 145,765

Group investments comprise: Held outside Held in 2018 Held outside Held in 2017the UK the UK Total the UK the UK Total

£'000 £'000 £'000 £'000 £'000 £'000

Equity investments 0 21,302 21,302 2,671 49,161 51,832Global multi-asset funds 74,057 28,929 102,986 30,951 39,396 70,347Property funds 93 0 93 112 696 808Alternative and other investments 6,856 1,019 7,875 7,523 1,032 8,555Fixed term deposits and cash 5,328 13,144 18,472 4,797 2,826 7,623

Total group investments 86,334 64,394 150,728 46,054 93,111 139,165

The College directly invests in a substantial portfolio of commercial property and one agricultural holding. All the property is held in the United Kingdom except for three assets in Berlin, Germany.

A formal valuation of the agricultural property in Liverpool was prepared by Simon P Alden MRICS FAAV of Adkin as at 31 July 2018.

Formal valuations for the majority of the commercial properties were prepared as at 31 July 2018 by their respective managing agents: by Nicholas F Rees MRICS of Savills for UK property (including Worcester Street car park) and Volker Zwing of Meterhoch2! for Berlin.

The remaining commercial properties are valued five yearly and were valued as at 31 July 2015, as follows: Nuffield Estate by Emily Ham MRICS of Adkin and 10a New Road by Marriotts.

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12 INVESTMENT IN JOINT VENTURE

Members' interest

OxWED

Total

£000 £000 £000Capital classified as liability 13,200 6,600 6,600Other reserves classified as equity (2,144) (1,072) (1,072)

Members' interest as at 31 July 2018 11,056 5,528 5,528

OxWED

Total

£000 £000 £000

Capital classified as liability 13,200 6,600 6,600Other reserves classified as equity (1,198) (599) (599)

Members' interest as at 31 July 2017 12,002 6,001 6,001

Nuffield College

share 50%

Nuffield College

share 50%

Oxford City

Council share 50%

As at 31 July 2018

As at 31 July 2017

Oxford West End Development Limited (OxWED) was incorporated in January 2016 as a joint venture between Nuffield College and Oxford City Council. Nuffield College holds a 50% share of the company. The purpose of the company is to develop and regenerate the West End area of Oxford. The objectives of the Joint Venture are aligned with Nuffield College’s broader aim of promoting social science in the West End.

Nuffield College provided a loan to the joint venture of £6,600k for land purchase and working capital. Interest is charged at 6.5%. Interest income of £1,096k was outstanding at 31 July 2018, in 2016/17 the comparative figure was £639k, (note 15).

Nuffield’s interest in the joint venture is measured using the equity method of accounting in the consolidated financial statements.

Nuffield’s share of the net assets of OxWED is included in the consolidated balance sheet and the net share of profit/(loss) is shown in the consolidated SoFA, and calculated as follows:

Oxford City

Council share 50%

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OxWEDProfit and Loss account for the year ended 31 July 2018

2018 2017£000 £'000

Income 258 231Expenditure (288) (208)

Operating Surplus/(Loss) (30) 23

Interest charge (915) (864)

Loss from Continuing operations (945) (841)

Total Comprehensive Income & Expenditure Loss (945) (841)

Balance Sheet 2018 2017£000 £'000

Stocks 13,021 13,021

Debtors 30 1

Cash at bank and in hand 907 315

Current Liabilities (2,902) (1,335)

Net assets attributable to members 11,056 12,002

The College had a contracted commitment at 31 July 2018 to provide a further loan to OxWED for the sum of £4,000k for the purchase of additional land in Oxpens (included in note 29).

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13 PARENT AND SUBSIDIARY UNDERTAKINGS

14 STATEMENT OF INVESTMENT TOTAL RETURN

Expendable TotalUnapplied Endowment Endowments

Trust for Total Investment Return Total

£'000 £'000 £'000 £'000 £'000

At the beginning of the year:Gift component of the permanent endowment 70,945 70,945 70,945Unapplied total return 83,184 83,184 83,184Expendable endowment 65,371 65,371Total Endowments 70,945 83,184 154,129 65,371 219,500

Movements in the reporting period:Gift of endowment funds 188 188 188Investment return: total investment income 6,178 6,178 2,709 8,887Investment return: realised and unrealised gains and losses 10,178 10,178 4,456 14,634Less: Investment management costs (948) (948) (404) (1,352)Less: Loan interest payable (346) (346) (148) (494)Other transfers (272) (272) (272)Net profit/(loss) in relation to joint venture (473) (473)Total 188 14,790 14,978 6,140 21,118

Unapplied total return allocated to income in the reporting period (4,959) (4,959) 0 (4,959)Expendable endowments transferred to income 0 (2,073) (2,073)

0 (4,959) (4,959) (2,073) (7,032)

Net movements in reporting period 188 9,831 10,019 4,067 14,086

At end of the reporting period:Gift component of the permanent endowment 71,133 0 71,133 71,133Unapplied total return 93,015 93,015 93,015Expendable endowment 69,438 69,438Total Endowments 71,133 93,015 164,148 69,438 233,586

The College holds 100% of the issued share capital in Nuffield Properties Limited, which has been dormant in the current and previous reporting periods.

The Trustees have adopted a duly authorised policy of total return accounting for the College investment returns with effect from 31 July 2013. The investment return to be applied as income is calculated as a weighted average of the prior year expenditure adjusted for inflation (80%) and the amount which would have been spent using 4.30% of the current endowment value (20%). The application of the above rule equates to a drawdown rate of 3.40% (2017 - 3.72%) of the opening balances of the relevant funds.The preserved (frozen) value of the invested endowment capital represents its open market value in 2003 together with all subsequent endowments valued at date of gift.

Permanent Endowment

30


15 DEBTORS2018 2017 2018 2017

Group Group College College£'000 £'000 £'000 £'000

Amounts falling due within one year:Trade debtors 6,551 1,381 6,551 1,381Amounts owed by College members 10 11 10 11Amounts owed by joint venture 1,096 639 1,096 639Loans repayable within one year 5 3 5 3Prepayments and accrued income 498 616 498 616

Amounts falling due after more than one year:Loans 0 25 0 25

8,160 2,675 8,160 2,675

16 CREDITORS: falling due within one year2018 2017 2018 2017


Trade creditors 656 673 656 673Amounts owed to College Members 1 1 1 1Holiday pay accrual 37 36 37 36Taxation and social security 1,136 245 1,136 245College contribution 0 154 0 154Accruals and deferred income 475 673 475 673Other creditors 71 128 71 128

2,376 1,910 2,376 1,910

17 CREDITORS: falling due after more than one year2018 2017 2018 2017


Bank loans 31,862 31,844 31,862 31,844

31,862 31,844 31,862 31,844

18 PROVISIONS FOR LIABILITIES AND CHARGES2018 2017 2018 2017


At start of year 0 0 0 0Charged in the Statement of Financial Activities 0 0 0 0Settled in the year 0 0 0 0

At end of year 0 0 0 0

A loan of £32 million was arranged in 2014/15 with Royal Bank of Scotland to (i) fund the acquisition of Investment Properties in Oxford and (ii) refinance the existing bank loans. The loan is repayable at the end of 10 years (2025) and may be repaid earlier.The interest rate is 1% above LIBOR. The loan is measured at amortised cost using the effective interest method.The loan arrangement fee of £193k has been treated as a deduction from the amount of the principal advanced and the effective interest rate on the loan has been calculated to reflect the arrangement fee being amortised over the loan period.

31


19 ANALYSIS OF MOVEMENTS ON FUNDSAt 1 August Incoming Resources Gains/ At 31 July

2017 resources expended Transfers (losses) 2018£'000 £'000 £'000 £'000 £'000 £'000

Endowment Funds - Permanent

General 130,755 5,369 (1,093) (64,441) 6,296 76,886Nuffield College Trust 60,000 2,536 62,536Guardian Fellowship Fund 2,023 70 (17) (70) 116 2,122GS Pollard Memorial Bursary 188 6 (2) (6) 10 196Ford Foundation Endowment 10,925 374 (94) (374) 620 11,451Gwilym Gibbon Bequest 5,360 184 (46) (182) 304 5,620Arthur Goodhart Fund 451 16 (4) (16) 26 473Andrew Mellon 1,502 54 (14) (51) 90 1,581PM Williams Memorial Appeal 113 4 (1) (4) 7 119Jemolo Research Fellowship 1,090 37 (9) (37) 61 1,142Oxford Graduate Scholarship Funds 1,722 252 (14) (50) 112 2,022

Subtotal (Permanent endowment) 154,129 6,366 (1,294) (5,231) 10,178 164,148

Endowment Funds - ExpendableGeneral 59,370 2,709 (552) (2,928) 4,456 63,055Endowment funds invested in joint venture 6,600 6,600Oxford Graduate Scholarship Funds 0 855 855

Subtotal (Expendable endowment) 65,970 2,709 (552) (2,073) 4,456 70,510

Total Endowment Funds - College 220,099 9,075 (1,846) (7,304) 14,634 234,658

Movement of endowment funds invested in JV (599) (473) (1,072)

Total Endowment Funds - Group 219,500 9,075 (1,846) (7,304) 14,161 233,586

Restricted Funds

Guardian Fellowship Fund 333 12 (4) 62 19 422GS Pollard Memorial Bursary 216 8 (4) 4 12 236Ford Foundation Endowment 2,251 77 (75) 105 129 2,487Gwilym Gibbon Bequest 2,548 88 (541) 0 143 2,238Arthur Goodhart Fund 1,123 39 (13) 14 65 1,228Andrew Mellon 240 9 (22) 0 15 242PM Williams Memorial Appeal 87 3 (1) 4 5 98Jemolo Research Fellowship 558 19 (8) 33 32 634Studentship Appeal and Studentship Support 13 2 0 0 0 15Oxford Graduate Scholarship Funds 44 1 (37) 50 3 61

Total Restricted Funds - College 7,413 258 (705) 272 423 7,661

Restricted funds held by subsidiaries 0 0 0 0 0 0

Total Restricted Funds - Group 7,413 258 (705) 272 423 7,661

Unrestricted FundsGeneral funds 2,241 1,966 (7,891) 7,334 3,650Fixed asset designated fund 11,106 (931) 10,175Other designated funds 1,582 1 (171) 609 2,021Pension reserve (1,059) 20 (1,039)

Total Unrestricted Funds - College 13,870 1,967 (8,062) 7,032 0 14,807

Unrestricted funds held by subsidiaries 0 0 0 0 0 0

Total Unrestricted Funds - Group 13,870 1,967 (8,062) 7,032 0 14,807

Total Funds 240,783 11,300 (10,613) 0 14,584 256,054

32


20 FUNDS OF THE COLLEGE DETAILS

The following is a summary of the origins and purposes of each of the Funds

Endowment Funds - Permanent:Sources/Origins Purposes

General endowment

Nuffield College Trust

Guardian Research Fellowship The Scott Trust

GS Pollard Memorial Bursary

Ford Foundation Endowment The Ford Foundation

Gwilym Gibbon Bequest Sir I. Gwilym Gibbon Arthur Goodhart Fund

Andrew Mellon Fund

PM Williams Memorial Appeal

Jemolo Research Fellowship

Oxford Graduate Scholarship Funds

Endowment Funds - Expendable:General Lord Nuffield's BequestSir Norman Chester's BequestP.M. Williams' BequestEndowment funds invested in joint venture Note 12Oxford Graduate Scholarship Funds

Restricted Funds:

The following funds represent unspent income from the respective endowment fund:Guardian Research FellowshipGS Pollard Memorial BursaryFord Foundation Endowment Gwilym Gibbon Bequest Arthur Goodhart Fund Andrew Mellon FundPM Williams Memorial AppealJemolo Research FellowshipOxford Graduate Scholarship Funds

Designated FundsFixed asset designated fund Unrestricted Funds which are represented by the fixed assets of the College

and therefore not available for expenditure on the College's general purposesOther designated fundsPension reserve

The General Unrestricted Funds represent accumulated income from the College's activities and other sourcesthat are available for the general purposes of the College.

Research by persons with experience in the print and broadcast media.

Lord Nuffield's Benefaction

To provide additional funds to support the College for postgraduate work especially in the study of social (including economic and political) problems.

Unrestricted Funds allocated by the Fellows for future costs of specific research Unrestricted Funds, in accordance with FRS 102, representing the defined benefit pension scheme liability

Five Trust Funds, the purpose of which is to pay some or all of the University and College fees together with a maintenance grant. The original capital cannot be spent.

Nuffield Foundation To provide a College for postgraduate work especially in the study of social (including economic and political) problems.

College matched studentship funding allocation

Studentship Appeal and Studentship Support For student financial support

CIPFA

A bare Trust established for the purpose of investing in the Oxford Funds, administered by OUem. The capital and income are treated in the same way and subject to the same restrictions as the general endowment.

Supports Fellows of the College in the field of politics, with particular reference to European politicsFor the study of the problems of Government.

Annual appeal organised by Nuffield College

J.Hausman, Swire Educational Trust and others

Supports scholarly activities in conjunction with the Andrew Mellon Professorship, and the field of American Government.

Appeal issued in 1984, administered by Nuffield College

Student support, and Library expenditure.

The Bank of Italy, the Banca Commerciale Italiana, the Banco di Santo Spirito, The Instituto S. Paolo di Torino and the Assicurazioni Generali

A visiting Fellowship by persons whose field of research is Italy.

Professor Goodhart, (organised by the Association of American Rhodes Scholars)

Provides for travel grants to and from North America.

The Andrew W. Mellon Foundation

To provide for studentship or research funding into modern developments in public finance.

33


21 ANALYSIS OF NET ASSETS BETWEEN FUNDS

Unrestricted Restricted Endowment 2018Funds Funds Funds Total£'000 £'000 £'000 £'000

Tangible fixed assets 10,175 0 0 10,175Property investments 0 0 110,205 110,205Other investments 0 7,661 143,067 150,728Investment in joint venture 0 0 5,528 5,528Net current assets 5,671 0 6,648 12,319Long term liabilities 0 0 (31,862) (31,862)Pension scheme liability (1,039) 0 0 (1,039)

14,807 7,661 233,586 256,054

Unrestricted Restricted Endowment 2017Funds Funds Funds Total£'000 £'000 £'000 £'000

Tangible fixed assets 11,106 0 0 11,106Property investments 0 0 111,940 111,940Other investments 0 7,413 131,752 139,165Investment in joint venture 0 0 6,001 6,001Net current assets 3,823 0 1,651 5,474Long term liabilities 0 0 (31,844) (31,844)Pension scheme liability (1,059) 0 0 (1,059)

13,870 7,413 219,500 240,783

34


22 TRUSTEES' REMUNERATION

The trustees of the College comprise the permanent Governing Body Fellows who sit on governing body by virtue of their employment.

Proposed changes in remuneration are scrutinised by the Fellows' Remuneration Review Committee.

Trustees of the College fall into the following categories:Professorial FellowOfficial FellowResearch FellowThere are also three trustees, the Warden, the Bursar and the Senior Tutor, who work full time on management.

Some trustees receive additional allowances for additional work carried out as part time College officerseg Dean. These amounts are included within the remuneration figures below.

Remuneration paid to trustees

Range

£Nil£1,000-£4,999£5,000-£9,999£10,000-£14,999£15,000-£19,999£20,000-£24,999£25,000-£29,999£30,000-£34,999£35,000-£39,999£55,000-£59,999£70,000-£74,999£80,000-£84,999£85,000-£89,999£90,000-£94,999£95,000-£99,999£105,000-£109,999£115,000-£119,999£120,000-£124,999£135,000-£139,999£160,000-£164,999£170,000-£174,999

Total 40 41

All trustees may eat at common table, as can all other employees who are entitled to meals while working.

Other transactions with trustees

See also note 30 Related Party Transactions.

2 194,689 0 02 215,163 3 317,8080 0 1 117,568

1,749,951

2 185,197 1 90,173

1 120,463 0 01 139,338 1 138,1880 0 1 164,2261 173,787 0 0

0 00 0 1 73,380

84,3470 0 1 88,6980 0 1

1 56,742

0

The Fellows who are the Trustees of the College for the purposes of charity law receive no remuneration for acting as charity trustees but are paid by either or both of the University and the College for the academic services they provide to the College.

1 5,807 01 10,958 1 12,930

9,0323 211,531

Number of Trustees / Fellows

£

2018

£

Gross remuneration, taxable benefits and pension contributions

95,5230 0 2 71,044

0 0 2 31,3914 88,420 3 64,896

Gross remuneration, taxable benefits and pension contributions

Number of Trustees / Fellows

1,816,659

0

Trustees are eligible for participation in the College housing scheme and 19 trustees live in houses owned jointly by the College as at 31 July 2018.

02 1

2017

15 415,405 17 457,4554 132,451 3

The amounts disclosed above include only payments made by the College; some trustees are paid jointly by the College and the University of Oxford.

No trustee claimed expenses for any work performed in discharge of duties as a trustee.

35


23 PENSION SCHEMES

Schemes accounted for under FRS 102 paragraph 28.11 as defined contribution schemes

Actuarial valuations

USS OSPSDate of valuation: 31/03/14 31/03/16Date valuation results published: 24/07/15 28/04/17Value of liabilities: £46.9bn £661mValue of assets: £41.6bn £528mFunding surplus / (deficit): (£5.3bn)a (£133m)b

Principal assumptions:

• Investment return 5.2%pac -

• Rate of interest (periods up to retirement) -• Rate of interest (periods up after retirement) -

• Rate of increase in salaries RPI + 1%pad RPI + 1% pa

• Rate of increase in pensions CPI padAverage

RPI/CPI paMortality assumptions:

• Assumed life expectancy at age 65 (males) 24.2 yrs 22.4 yrs• Assumed life expectancy at age 65 (females) 26.3 yrs 24.7 yrs

Funding Ratios:• Technical provisions basis 89% 80%• Statutory Pension Protection Fund basis 82% 67%• 'Buy-out' basis 54% 42%• Estimated FRS 102 Total Funding level 77% 82%

Recommended employer's contribution rate (as % of pensionable salaries): 18%e

Effective date of next valuation: 31/03/17 31/03/19

The College participates in two principal pension schemes for its staff - the Universities Superannuation Scheme (USS) and the University of Oxford Staff Pension Scheme (OSPS). The assets of the schemes are each held in separate trustee-administered funds. USS and OSPS schemes are contributory mixed benefit schemes (i.e. they provide benefits on a defined benefit basis - based on length of service and pensionable salary and on a defined contribution basis – based on contributions into the scheme). Both are multi–employer schemes and the college is unable to identify its share of the underlying assets and liabilities relating to defined benefits of each scheme on a consistent and reasonable basis. Therefore, in accordance with the accounting standard FRS 102 paragraph 28.11, the College accounts for the schemes as if they were defined contribution schemes. As a result, the amount charged to the Statement of Financial Activities represents the contributions payable to the schemes in respect of the accounting period.

In the event of the withdrawal of any of the participating employers in USS, the amount of any pension funding shortfall (which cannot be otherwise recovered) in respect of that employer will be spread across the remaining participating employers and reflected in the next actuarial valuation of the scheme.

However, in OSPS the amount of any pension funding shortfall in respect of any withdrawing participating employer will be charged to that employer.

Qualified actuaries periodically value the USS, OSPS schemes using the ‘projected unit method’, embracing a market value approach. The resulting levels of contribution take account of actuarial surpluses or deficits in each scheme. The financial assumptions were derived from market conditions prevailing at the valuation date. The results of the latest actuarial valuations and the assumptions which have the most significant effect on the results.

'Gilts' + 1.2%pa 'Gilts' + 1.2%pa

23% decreasing to 19% from 01/08/2017f

a. USS’s actuarial valuation as at 31 March 2014 takes into account the revised benefit structure effective 1 April 2016 agreed both by the Joint Negotiating Committee and the Trustee in July 2015 following the Employers’ consultation which concluded in June 2015. Key changes agreed include: for Final Salary section members, the benefits built up to 31 March 2016 were calculated as at that date using pensionable salary and pensionable service immediately prior to that date and going forwards will be revalued in line with increases in official pensions (currently CPI); all members accrue a pension of 1/75th and a cash lump sum of 3/75ths of salary each year of service in respect of salary up to a salary threshold, initially £55,000 p.a., with the threshold applying from 1 October 2016; member contributions are 8% of salary; a defined contribution benefit for salary above the salary threshold at the total level of 20% of salary in excess of the salary threshold; and optional additional contributions payable into the defined contribution section from 1 October 2016 of which the first 1% of salary is matched by the employer Further details about the benefits may be reviewed on USS’ website, www.uss.co.uk. For the period up to 1 April 2016 the employer deficit contribution was 0.7% p.a. of salaries based on the assumptions made. After allowing for those changes, the actuary established a long term employer contribution rate of 18% pa of salaries for the period from 1 April 2016 to 31 March 2031. On the assumptions made and with the salary threshold and defined contribution section implemented this gives rise to deficit contributions of at least 2.1% p.a of salaries. At 31 March 2018 USS reported that the estimated funding deficit was £8.4 bn (88% funded).

36


Assumption

Initial discount rate

Discount rate in 20 years' time

RPI inflation

Rate of mortality

Assumption

Valuation rate of interest

Rate of pension increases

Life expectancy

increase by £0.5bn

OSPS Change in assumption

Impact on OSPS technical provisions(from 80% funded at

31/03/2016)

b. OSPS’ actuarial valuation as at 31 March 2016 identified a required long-term employer contribution rate of 17.3% of total pensionable salaries, with a funding deficit of £133 m. The valuation results reflect a number of changes to benefits that were agreed following an Employers' consultation in early 2017, including from 1 April 2017 a change in indexation based on the average of RPI and CPI, from 1 October 2017 a defined contribution section for new entrants and from 1 April 2018 breaking the final salary link for certain members and increased employee contributions. The actuary has certified that the recovery plan should eliminate the deficit by 30 June 2027. The next triennial valuation is due with an effective date of 31 March 2019.

c. USS’ actuary has assumed that the investment return is 5.2% in year 1, decreasing linearly to 4.7% over 20 years.

d. USS’ actuary has assumed that general pay growth will be CPI in year 1, CPI + 1% in year 2 and RPI + 1% pa thereafter. It is assumed that CPI is based on the RPI assumption (market derived price inflation of 3.6% p.a less an inflation risk premium) less RPI/CPI gap of 0.8% p.a.

e. As noted above (note a) the USS employer contribution rate is 18% of salaries from 1 April 2016. The total employer contributions include provisions for the cost of future accrual of defined benefits (DB) (net of member contributions to the DB section), deficit contributions, administrative expenses of 0.4% of salaries and from the implementation of the salary threshold the employer contribution towards defined contribution benefits including employer matching contributions and certain investment management costs relating to the DC section. The 2017 actuarial valuation of USS has been undertaken but this has not yet been formerly completed. The 2017 valuation has set out the challenges currently facing the scheme and the likelihood of significant increases in contributions being required to address these challenges. In the judgement of the college, as the 2017 valuation has not formally completed, and there remains various stages of consultation around the key factors specifically relating to the funding of the past deficit, including the level of contributions required, the period of the recovery plan and the level of asset performance over the period, it remains appropriate to continue to account for the past deficit obligation in accordance with the plan agreed after the 2014 actuarial valuation. However, there is a significant risk that the year-end provision as calculated will not reflect the position following the final outcome of negotiations, potentially by a very significant amount depending upon what is finally agreed as regards future deficit contributions and their duration. The college expects to have greater clarity in this respect during the next financial year.

f. As noted above (note b), the OSPS employer contribution rate required for future service benefits in the defined benefit section alone is 17.3% of total pensionable salaries from 1 April 2018. The employer contribution rate was 23% from 1 August 2016 to 31 July 2017. It was agreed that employer contribution rate would be 19% for both defined benefits members and defined contributions members who join on or after 1 October 2017. Part of contribution for defined contribution members would be paid to the defined benefit section to cover the deficit recovery plan, the provision of ill-health and death-in service benefits and the expenses of administering the defined contribution section.

Sensitivity of actuarial valuation assumptions Surpluses or deficits which arise at future valuations may impact on the College’s future contribution commitment. The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:

USS Change in assumption Impact on USS liabilities

increase / reduce by 0.25%

decrease / increase by £0.8bn

increase / reduce by 0.25%

decrease / increase by £1.1bn

increase / reduce by 0.1% increase/ decrease by £0.8bn

more prudent assumption (mortality used at last valuation, rated down by a further year)

decrease by 1.0% 68%

increase by 1.0% 69%

more prudent assumption (life expectancy increases by 3 years)

72%

37


OSPS USSFinish Date for Deficit Recovery Plan 30/06/27 31/03/31Average staff number increase 2.00% 2.00%Average staff salary increase 2.00% 3.00%Average discount rate over period 1.95% 2.20%Effect of 0.5% change in discount rate:+ 0.5% (£9k) (£24k)- 0.5% £10k £25kEffect of 1% change in staff growth:+ 1% £30k £51k- 1% (£28k) (£47k)

Pension charge for the year

Scheme 2018 2017£000's £000's

Universities Superannuation Scheme 389 423University of Oxford Staff Pension Scheme 124 145Other schemes – contributions 0 0Total 513 568

24 TAXATION

25 FINANCIAL INSTRUMENTS

The carrying values of the College's financial assets and liabilities are summarised by the following categories:

Note 2018 2017£'000 £'000

Financial AssetsMeasured at fair value through profit or lossInvestments 11 150,728 139,165

Measured at undiscounted amount receivableTrade and other debtors 15 8,160 2,675

Measured at amortised costLoan 30 0 25

Financial LiabilitiesMeasured at undiscounted amount payableTrade and other creditors 16 2,376 1,910

Measured at amortised costBank loan 17 31,862 31,844

Included in other creditors are pension contributions payable of £nil (2017: £nil).

The College is able to take advantage of the tax exemptions available to charities from taxation in respect of income and capital gains received to the extent that such income and gains are applied to exclusively charitable purposes.

The pension charge recorded by the College during the accounting period (excluding pension finance costs) was equal to the contributions payable after allowance for the deficit recovery plan as follows:

A copy of the full actuarial valuation report and other further details on the scheme are available on the relevant website: www.uss.co.uk, www.nhsbsa.nhs.uk/Pensions, www1.admin.ox.ac.uk/finance/epp/pensions/schemes/osps, www.saul.org.uk .

Deficit Recovery Plans In line with FRS 102 paragraph 28.11A, the College has recognised a liability for the contributions payable for the agreed deficit funding plan. The principle assumptions used in these calculations are tabled below:

A provision of £1,039k has been made at 31 July 2018 (2017: £1,059k) for the present value of the estimated future deficit funding element of the contributions payable under these agreements, using the assumptions shown. The provision reduces as the deficit is paid off according to the pension recovery scheme.

38


26 RECONCILIATION OF NET INCOMING RESOURCES TONET CASH FLOW FROM OPERATIONS 2018 2017

Group Group£'000 £'000

Net income/(expenditure) 15,744 32,250

Elimination of non-operating cash flows:Investment income (9,214) (9,608)(Gains)/losses in investments (15,057) (30,872)Endowment donations (188) (341)Depreciation 285 282Financing costs 494 465(Surplus)/loss on sale of fixed assets (468) (195)Decrease/(Increase) in stock 10 (13)Decrease/(Increase) in debtors (625) (110)(Decrease)/Increase in creditors 466 (78)(Decrease)/Increase in provisions 0 0(Decrease)/Increase in pension scheme liability (20) (21)

Net cash provided by (used in) operating activities (8,573) (8,241)

27 ANALYSIS OF CASH AND CASH EQUIVALENTS2018 2017£'000 £'000

Cash at bank and in hand 6,465 4,629Investment asset cash 18,472 7,623Bank overdrafts 0 0

Total cash and cash equivalents 24,937 12,252

28 FINANCIAL COMMITMENTS

At 31 July 2018 the College had no annual commitments under non-cancellable operating leases.

29 CAPITAL COMMITMENTSThe College had contracted commitments at 31 July 2018 for future capital projects totalling £9,570k (2017 - £9,019k).

39


30 RELATED PARTY TRANSACTIONS

The following trustees had loans outstanding from the College at the end of the year.2018 2017£'000 £'000

M Mills 0 25

2018 2017£'000 £'000

R Allen 156 156B Ansell* 0 124F Billari 0 411S Bond* 159 159R Breen* 293 293S Broadberry* 101 101M Browning* 266 266J Darwin 289 289M Ellison* 374 374A Eggers* 415 415G Evans* 608 608D Gallie 111 111D Gambetta 0 176E Gonzalez Ocantos* 227 227G Hughes 302 302E Kechagia-Ovseiko* 327 327P Klemperer* and M Meyer* 222 222C Laborde* 141 0K MacDonald 173 173M Mills* 414 414C Monden* 210 210T Moore* 300 300B Nielsen* 0 208D Rueda* 179 179D Snidal* 313 313

Total net book value of properties owned jointly with trustees 5,580 6,358

B. Ansell £155k B Nielsen £323k

31 CONTINGENT LIABILITIES

There were no contingent liabilities which require disclosure.

32 POST BALANCE SHEET EVENTS

On 9 October 2018, contracts were exchanged for the sale of an investment property at a premium of £4.9m above the market value as at 31 July 2018. No adjustment to the reported market value of the property has been made in these financial statements. The completion of the sale is scheduled for January 2019 and the transaction will be accounted for in the 2018-19 financial statements.

All joint equity properties are subject to sale if the Fellow ceases to be a member of the College (or of an equivalent institution with Oxford University) other than at retirement. The Fellows pay compensation to the College on the College owned share of the properties, at a rate of 1% of the original College equity, indexed by CPIH.

As at 31 July 2018, the College had properties with the followings net book values owned jointly with fellows under joint equity ownership agreements between the fellows and the College. Those fellows who were trustees as at 31 July 2018 are marked with an asterisk in the list below.

The College is part of the collegiate University of Oxford. Material interdependencies between the University and of the College arise as a consequence of this relationship. For reporting purposes, the University and the other Colleges are not treated as related parties as defined in FRS 102.

Members of the Governing Body, who are the trustees of the College and related parties as defined by FRS 102, receive remuneration and facilities as employees of the College. Details of these payments and reimbursed expenses as trustees are disclosed separately in these financial statements.

During the course of the year, two participants of the housing scheme who were also trustees of the College bought out the College’s share of their respective properties. The trustees and the market values of the College’s share of the properties bought out were as follows:

In each case, a professional valuation was obtained from an independent Chartered Surveyor in order to establish the market value of the property and therefore the College’s share of it.

40

ANNUAL REPORT AND FINANCIAL STATEMENTSYear ended 31 July 2018

Registered Charity Number 1137506

Documents

ANNUAL REPORT AND FINANCIAL STATEMENTSd307gmaoxpdmsg.cloudfront.net/collegeaccounts1718/Nuffield.pdf · Governing Body, Officers and Advisers 2 - 4 . Report of the Governing Body